[hristov]

Nobody is required to give out rebates to pharmacy benefit managers and the like. That is a problem the pharma companies created by themselves. The pharmas can drop their list prices and stop rebates tomorrow if they really wanted.

[jVinc]

If you where a pharmacy benefits manager, and you where sitting across two different potential drug makers and one says "I'll let you have it at 30$!" and the others says "I'll let you have it at 120$ with a 50% rebate!" which one do you think you'd take?

The forces at play in the pharma/PBM negotiation leads to price increases instead of price competition because the PBM effectively sits on both sides of the table. They want high rebates and they don't care about list-prices as long as they can take back a bit cut of them. This is why you see rebates reaching levels close to 70%. Imagine if you sent a guy to negotiate a car purchase for you, and that guy was looking at taking 70% of the net you pay through rebates from the car dealership. Do you honestly think he would be looking for the cheapest deal?

[s1artibartfast]

No they cant. The pharmacy benefit managers would drop the products and it is illegal for the manufactures to sell direct to hospitals